The focus of this blog is on the wonders of government-run health-care everywhere but I also note the damage done to private medicine by a legal system that supports predatory litigation.

The long-established socialized medicine systems in Britain and Australia are a particularly relevant warning about where such systems end up.

Posts by John J. Ray (M.A.; Ph.D.)

Wednesday, December 23, 2009

Cloture for Obamacare bill

President Obama’s vision of near universal healthcare took a big step closer to reality yesterday when his plans secured a watertight majority in the Senate. With Washington covered in 2ft of snow and some senators flown in on government jets to make sure they were there for the 1am roll call, all 58 Democrats and the chamber’s two independents held together to deliver the 60 votes needed to cut off Republican efforts to block the Bill.

The vote, which followed a frenzy of last-minute compromises to win over the last Democratic moderate, clears the way for a Senate Bill to win passage in a vote scheduled for 7pm on Christmas Eve. A final piece of legislation — the centrepiece of Mr Obama’s domestic agenda — is likely to reach his desk next month.

Republicans, who voted unanimously against the package, decried the $871 billion (£540 billion) ten-year Bill as a hastily crafted, fatally flawed partisan monstrosity that would raise taxes, increase healthcare costs and explode the already record budget deficit. Mitch McConnell, the senior Senate Republican, called it a mess and a “blind call to make history”.

Yet after a century in which many US presidents have talked about universal health coverage — and with some, including the Republican Richard Nixon and Democratic Bill Clinton trying and failing — Mr Obama will rightly be able to claim that he has achieved something no other US president has managed.

The White House and Democratic leaders conceded that the Bill was far from perfect, but argued that failure to pass some form of sweeping legislation would have consigned efforts to reform the health insurance industry to the political wilderness, possibly for at least another generation. Tom Harkin, a Senate liberal who had to swallow significant concessions to moderates, called his backing of the Bill “the defining vote of my career”.

Watching from the chamber’s gallery was Victoria Kennedy, the widow of Edward Kennedy — a staunch liberal who campaigned for health reform during his career. Hours before the vote she argued in a piece written for The Washington Post that her husband would have voted for the Bill because “he said that it was better to get half a loaf than no loaf at all, especially with so many lives at stake”.

Obstacles remain, but yesterday’s vote was seen as the critical hurdle Mr Obama needed to clear to see a final piece of legislation emerge. If passed on Christmas Eve the Senate Bill will need to be merged, or reconciled, with a version passed by the House last month, and there remain significant differences between the two.

Unlike the $1 trillion House Bill, the Senate version contains no government-run health insurance programme, known as the “public option”. Liberals have seen this as a crucial test for any legislation because they claim that it is needed to provide competition to keep the costs of private insurers down. Harry Reid, the Democratic Senate leader, dropped the public option to win over Joe Lieberman, the former Democrat turned independent, and the final Democratic holdout, Ben Nelson of Nebraska.

Mr Nelson also won restrictions on the use of federal money for abortions, and an extraordinary financial gift to his home state. Unlike every other US state, Nebraska will no longer have to share the cost with central government of providing Medicaid, the medical assistance programme for low income Americans — a concession condemned by Republicans as a blatant bribe. Because Mr Reid has no room for manoeuvre — one defection would doom the Bill — the Senate version is expected largely to prevail during negotiations with the House.

Under the legislation, an additional 30 million Americans, who are currently uninsured, would receive coverage. The Bill will require nearly all Americans to obtain health insurance, or face a financial penalty for failing to do so. About half of those would be helped to do so by an expansion of Medicaid.

Small businesses would receive tax breaks to help them to provide coverage to employees. Big companies would face financial penalties for failing to do so. Insurance companies would no longer be able to decline coverage to people with pre-existing conditions.

To pay for the reform, the Bill would impose an array of taxes and fees, including tax rises for individuals earning more than $200,000 and couples earning more than $250,000. The most expensive health insurance coverage, known as “Cadillac plans”, will be taxed heavily. The Bill would also slash government spending on Medicare, the government subsidy programme for the elderly.

A year into the Obama era, the left claims triumph (but they admit the policies stink)

By JAMES TARANTO

Well, they did it. Through a combination of intimidation and bribery (using our money, of course), the Democrats who run the Senate achieved cloture on their version of ObamaCare. The 60-40 vote was strictly along party lines, and it took place at 1:08 a.m. Monday, a time when any decent person is either home in bed or out at a bar.

So, a big triumph for the left, right? More than 64 years after President Truman proposed it, "universal health care" is finally on the verge, or at least the precipice, of becoming reality.

Only there's one problem: Many on the left admit that by their own lights, ObamaCare is bad policy. Here's a fascinating exchange from PBS's "Bill Moyers Journal" Friday. Moyers is interviewing the liberal-left economist Robert Kuttner and the liberal-left journalist Matt Taibbi. Both agree that the bill is very bad, but Kuttner wants Congress to enact it anyway:

Kuttner: Well, it's so far from what I think is necessary that I don't think it's a it's a good bill. But I think if it goes down, just because of the optics of the situation and the way the Republicans have framed this as a make-or-break moment for President Obama, it will make it easier for the Republicans to take control of Congress in 2010. It will make Obama even more gun-shy about promoting reform. It will create even more political paralysis. It will embolden the Republicans to block what this president is trying to do, some of which is good, at every turn. So I would hold my nose and vote for it. . . .

Moyers: Aren't you saying that in order to save the Democratic president and the Democratic Party in 2010 and 2012 you have to have a really rotten health insurance bill?

Kuttner: Well, when you come down to one pivotal moment where a bill is before Congress and the administration has staked the entire presidency on this bill and you're a progressive Democrat are you going to vote for it or not? Let me put it this way, if I were literally in the position that Joe Lieberman is in and it was up to me to determine whether this bill live or die, I would hold my nose and vote for it even though I have been a fierce critic of the path this administration has taken. . . .

The Democrats are really between a rock and a hard place here, because if it loses, there's one set of ways the Republicans gain. If it wins, there could be another set of ways that the Republicans gain. And this is all because of the deal that our friend, Rahm Emanuel struck back in the spring of passing a bill that's a pro-industry bill that doesn't really get at the structural problems. . . .

But now we're down to a moment of final passage. And maybe my views are very ambivalent. But I would still vote for it because I think the defeat would be absolutely crushing in terms of the way the press played it, in terms of the way it would give encouragement to the far right in this country that we can block this guy if we just fight hard enough, if we just demagogue it.

Taibbi: But couldn't that defeat turn into--that crushing defeat, couldn't that be good for the Democrats? Couldn't it teach them a lesson that, you know, maybe they have to pursue a different course in the future?

Kuttner: Well, you're younger than I am.

There is little doubt that the attitude Kuttner expresses is shared by some senators who voted "yes" at 1:08 a.m. Sunday--all of whom, by the way, also are older than Taibbi. The cynicism is breathtaking: The Kuttner caucus is willing to subject a sixth of the nation's economy, and the lives of millions, to an admittedly awful legislative scheme, on the basis of the dubious assumption that it will help their party politically in the short term, and also to spite "the far right in this country."

Senator Joe Lieberman should be ashamed of himself. He said he would not support a “public option.” But he did. He knows he did—and he’s hoping the American people don’t. Of course, to listen to the press coverage of Senate Majority Leader Harry Reid’s manager amendment, one would think that taxpayer-subsidized, government-run health care was no longer a part of the proposal. For example, reports TalkingPointsMemo.com, “The public option is dead. Its successors are dead.” Oh, really.

Then, how is it that, so conspicuously in the Congressional Budget Office’s (CBO) cost estimate, there lays some $871 billion in taxpayer subsidies from insurance coverage provisions? Is this some kind of sick joke? Do Harry Reid and Barack Obama really think they can spend a trillion dollars over ten years on government-run health care—and then convince taxpayers that they are not doing so, simply by rhetorical tomfoolery and sleight of hand?

Does it really matter if the taxpayer subsidies are funneled through insurance “exchanges” rather than monolithic bureaucracies? Did the public-private model serve Fannie Mae and Freddie Mac any better when they finally went bankrupt last year in the midst of the financial crisis?

The answers to these questions are obvious enough. Whether through single-payer, co-ops, insurance “exchanges” or the like, taxpayers are going to be on the hook for a trillion dollars. As if the problem with the “public option” was a marketing difficulty to be surmounted by changing the name.

The numbers don’t lie, although they tend to be understated. For example, the CBO writes that the net cost “reflects a gross total of $871 billion in subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; [but] those costs are partly offset by $149 billion in revenues from the excise tax on high-premium insurance plans and $108 billion in net savings from other sources.”

And so, the CBO concludes, the cost of increasing subsidized health care is only $614 billion. How do they come to that conclusion? By including the $149 billion in revenues and $108 billion in “savings” in the same table labeled “net changes in the deficit from insurance coverage provisions.”

Which is simply duplicitous. To discover the hidden cost of the insurance provisions, one has to read the following footnote to that controversial table: “Includes excise tax on high-premium insurance plans.” Really, the excise tax should have been included in the table clearly labeled, “net changes in the deficit from other provisions affecting revenues.” And, as a result, that table should have read that the bill increases taxes by $413 billion, not $264 billion.

The high jinks do not stop there, however. The estimate claims that the bill “would yield a net reduction in federal deficits of $132 billion over the 2010-2019 period.” That is accurate, of course, only if one assumes the impossible that the $483 billion in proposed cuts to Medicare ever occur. By far the most unpopular provision has been the inevitable rationing of care away from seniors that would occur under the Congressional Democrat proposal.

Of course, the only purpose of the phony “cuts” is to obtain a better score from CBO. The “cuts” are restored in concurrent legislation called the “doc-fix”. The result? The new “public option” will spend some $350 billion more than it takes in through revenues in its first ten years alone. And, the subsidized care provided through the exchanges will still create a state-run monopoly in the health insurance market, drive up premiums, muscle individuals out of their privately-provided care, deplete the public treasury, and once bankrupt, result in the rationing of medical treatment away from the American people, especially seniors.

All of the goals of the Democrat-sponsored plan—reducing costs, slashing the deficit, expanding coverage, etc.—all fail, raising the question: Why? The only reason is that the stated goals are a ruse. And the real goal is ideological: to move America to a socialized single-payer health system that will cost trillions—one way or another.

Senator Joe Lieberman had but one chance to stop this madness in the final cloture vote early this morning. If he had meant what he said that he did not support a “public option,” surely he would have agreed that $871 billion in taxpayer subsidies for health insurance is quite public. Instead, he voted along party lines in the monumental 60-40 vote. Changing the name and funneling the taxpayer dough through “exchanges” will not hide the facts—or his shame.

The lust to score a political win on health care is making Tiger Woods look like a saint. Congressional Democrats are willing to throw all common sense overboard in their frenzy for a conquest. Of all the desperate ideas in the current health care proposals before Congress, the absolute worst is the "Medicare buy-in" slipped in by Harry Reid at the last minute.

This has long been a dream of the left: Expand Medicaid to ever-higher income levels and Medicare to ever-lower age groups, and pretty soon the two populations will meet in the middle. Voila! Single Payer Nirvana!

There are a few problems with this idea, however, starting with its effects on the health care system, on patients, and on the federal budget and the country as a whole. In a recent report, Richard Foster, chief actuary for the federal government, concluded 20 percent of all U.S. hospitals and nursing homes could go out of business under the reform proposals-even before the Medicare buy-in was proposed. Medicare and Medicaid already don't pay these facilities enough to cover their costs.

According to the actuarial consulting firm Milliman, Medicare pays hospitals $34.8 billion less than their costs and physicians $14.1 billion less than what it costs to provide services. Medicaid underpays hospitals $16 billion and doctors $23.7 billion. The only way doctors and hospitals can absorb such underpayments is by overcharging people with private insurance $89 billion a year.

Even before the Medicare buy-in proposal, the health reforms were going to cut Medicare spending by $50 billion a year, making it even harder for providers to stay in business. The Medicare buy-in makes this problem much worse by removing a large portion of the privately insured population that currently subsidizes Medicare and Medicaid, putting them into a program that pays far less than it costs. Moreover, this is a population of high users of health care services, so their impact on costs will be even greater.

The effect on health care services will be profound. Many more providers will go out of business or stop seeing people on Medicare, which will make access to services much more difficult. In addition to decreased access to health care services, it is not clear that the millions of new Medicare users will save any money or get improved health insurance. The population of ages 55-64 is the segment most likely to be insured today. According to the Census Bureau only about 12 percent of this age group is uninsured, compared to about 26 percent of people aged 25 to 34, 18.5 percent of those aged 35 to 44 and 15.6 percent of people aged 45 to 54.

Regarding quality, Medicare wouldn't even qualify as "creditable coverage" under the current proposals. The core program doesn't cover prescription drugs or preventive care, and it has no limit on out-of-pocket spending. People who signed up for Medicare would have to buy a supplemental policy to cover the gaps.

Finally, Medicare is already headed for bankruptcy. The federal government reports it will be spending more money than it takes in by 2017, and that is before most of the Baby Boom generation becomes eligible. The system is on the hook for $89 trillion in spending, and not a penny of that is actually funded. Extending Medicare is madness piled on top of insanity. And all of this is just to give the Congressional Democrats and President Barac k Obama a political "win" to hang on the wall.

As the U.S. Senate works feverishly to further distort the marketplace and deprive Americans of even more of what remains of their liberty by “overhauling” the health care industry, I offer you these excerpts from a December 16th article run by CBS News:

“Obama repeated his demand for action, telling ABC News ‘the federal government will go bankrupt’ if the health care bill fails. He said Medicare and Medicaid are on an ‘unsustainable’ path if no action is taken.

“To make matters more complicated, the Senate stumbled into health care gridlock after a Republican senator forced the clerk to read aloud a 767-page amendment.

“GOP Sen. Tom Coburn of Oklahoma had sought approval to require that any amendment considered by the Senate must be offered 72 hours in advance and with a full cost report.

“When he was rebuffed by Democratic Sen. Max Baucus of Montana, Coburn invoked his right to require that an amendment by another Democrat be read aloud. That sent the Senate into limbo, since the amendment by Vermont Independent Bernie Sanders was 767 pages long. It called for guaranteeing coverage to all through a public program similar to Medicare.

“Sanders withdrew his amendment some three hours later, after 139 pages had been read, with a broadside at Republicans. Pounding the lectern on his desk, his voice rising, he accused Republicans of trying to shut down the legislative process. ‘That is an outrage,” Sanders said. ‘People can have honest disagreements, but in this moment of crisis it is wrong to bring the United States government to a halt.’”

To Obama I would say that the federal government is not “going” bankrupt – it already is. The amount of federal debt is irresolvable, unpayable, and entirely beyond repair. What is even more outrageous about this statement is that Medicare, Medicaid, and so-called Social Security overall have been unsustainable for decades. What do you expect from a socialist system modeled after Otto von Bismarck’s 19th century Prussia? But Obama’s solution is pouring more money into the mouth of the monster, and further impinging upon individual choice – not necessarily health care provider, but whether one chooses to purchase health care or not. In Obama’s collectivist universe – along with most of his fellow statists – it’s okay, in terms of bureaucratically sanctioned progressive escalation of force, to ultimately kill people who choose to resist mandatory health care. Sick indeed.

Health care reform isn’t about making sure people are healthy. It never was. Like all actions of government, it is a justification for further control and enslavement of a population. It’s about non-productive fat cats living high off the hog at the expense of the politically unconnected working class. It’s about simple ruthless domination. It’s a cynical, insidious power play. If politicians and bureaucrats were truly concerned about people’s well-being (other than their own, of course), they’d resign their posts, find jobs that are actually useful and beneficial, and put government out of business forever.

This is where I need to address Vermont’s Bernie Sanders, a self-proclaimed and proud socialist directly: “’…in this moment of crisis it is wrong to bring the United States government to a halt.’”

No, Sanders, you just don’t get it. That is precisely what we need, and soon, and permanently. And since at least the time of Gustave de Molinari, market anarchism has been there, waiting only to point out the near-infinite ways in which that is possible.

Does anyone remember the TV show "Supermarket Sweep"? Contestants would compete with one another by careening through a supermarket and grabbing as many products as they could toss into a basket. The winner was the shopper whose cart carried the biggest price tag when the bell sounded.

It's a fitting image for the way Nancy Pelosi and Harry Reid have handled the most important domestic issue of the decade. They've raced down the health policy aisles, sweeping items off the shelves and into their legislative carts, heedless of nutritional value, taste, or cost. As items dropped out on the hairpin turns, others were shoved into the spaces. Harry Reid inserted the Medicare "buy-in" at the 11th hour and just as quickly withdrew it under pressure. No organizing principle has governed the contents of their baskets (Pelosi added and jettisoned abortion coverage), just an urgent imperative to pass something. And now, as the clock winds down, they are declaring, as a journalistic cheerleader at the Washington Post put it, "a legislative feat of epic proportions."

Actually, it was the sloppiest and most slapdash legislative process ever to accompany a major bill. The 383-page manager's amendment, making changes to the Senate bill, was released on the morning of the cloture vote. Secrecy marked Reid's handling of the bill throughout. Not only Republicans, but Democrats, too, were kept from studying the legislation. Payoffs to wavering Sens. Lieberman, Landrieu, and Nelson, on the other hand, were blatant.

The Democratic leaders of the House and Senate, in concert with the White House, have bullied, bribed, and rushed their members to vote on this legislation so that the deed could be done before constituents -- who oppose it forcefully -- could confront their representatives face-to-face over the Christmas break.

The Democrats have endured bruising internecine conflicts and risked the loss of between 20 and 40 seats in 2010 (Pelosi's estimate) for this. And what have they achieved? Their goal -- a single-payer system or a glide path to one -- remains as distant as ever. Instead, they have produced (or will, after the conference committee) an enormous new $2.5 trillion octopus of federal regulation that will increase premiums, contribute to medical cost inflation, reduce quality and choice of care, and deeply politicize an aspect of life that most Americans regard as sacrosanct. Additionally, and most alarmingly, it will aggravate the already crushing debt we are accumulating.

President Obama has betrayed every ringing promise he made about this reform. People will not be able to keep their health plans if they are happy with them. The federal government will determine which plans pass muster. As for not adding one dime to the federal deficit? Risible. The "savings" in the Senate bill consist of cuts to Medicare, not increased competition or more efficient delivery of services. And while CBO has scored the bill as reducing the deficit, CBO must abide by the assumptions Congress presents. It cannot say what we know from history to be the truth: Congress will not make cuts in Medicare. Besides, every entitlement ever enacted has wound up costing orders of magnitude more than the estimates at passage. That's why the Medicare and Social Security unfunded liability is currently $107 trillion, according to a 2009 trustees' report. The Reid bill will add at least 15 million new beneficiaries to Medicaid, accelerating that program's budget-busting momentum.

The president also promised that no one earning less than $250,000 would pay higher taxes. But under both the Senate and House bills, people who do not purchase health insurance will be slapped with an excise tax (2.5 percent of adjusted gross income under Pelosicare, and $750 or 2 percent of income, whichever is larger, under Reidcare).

The Democrats have not achieved their goal of completely lassoing one-sixth of the economy, but their mammoth legislation (the House and Senate bills both top 2,000 pages) will apply heavy-handed regulation that will further gum up a system already choking on bureaucracy. Americans will be forced to buy health insurance. Insurance companies will be forbidden to price their services according to actuarial tables. And no aspect of medical care will be free of political interference. (One section of the Senate bill reinstates coverage for DXA scans because two senators insisted upon it. Another requires breastfeeding breaks in the workplace.)

The Democrats will create, among others, the following new bureaus: The Grant Program for Health Insurance Cooperatives, the Telehealth Advisory Committee, the Community Based Medical Home Pilot Program, the Center for Comparative Effectiveness Research, and the Qualified Health Benefits Plan Ombudsman. In short, Democrats have done the maximum amount of damage to our system that they could manage under the circumstances.

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Background

Postings from Brisbane, Australia by John Ray (M.A.; Ph.D.) -- former member of the Australia-Soviet Friendship Society, former anarcho-capitalist and former member of the British Conservative party.

This blog gives a lot of attention to events in Australia and Britain -- places where there already exist systems similar to the one most likely to befall the USA if the Democrats get their way -- "Free" medical care supposedly available to all through government hospitals but with a competing private sector as well. The Canadian system is considered too Soviet to provide a likely model for the USA

TERMINOLOGY: Many of my posts concern the very instructive state of socialized medicine in Australia. Like the USA, Germany and India, Australia has a system of State governments which have substantial independence from the central (Federal) government and it is they who are mainly responsible for "free" health services. It may therefore be useful to some for me to note the standard abbreviations for the States concerned: QLD (Queensland), NSW (New South Wales), WA (Western Australia), VIC (Victoria), TAS (Tasmania), SA (South Australia).

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Conservatives do NOT object to helping the poor. Government welfare legislation in aid of the poor was in fact first introduced by conservatives -- Bismarck and Disraeli in the 19th century. What conservatives want is for the help to be delivered in a sane manner. And anyone who thinks that government bureaucracies can run hospitals well is completely out of touch with reality.

One of the oldest "free" public hospital systems in the world is that in the Australian State where I live: Queensland. It dates from 1944 (Britain's NHS began in 1948). So its advanced state of decay reveals well where the slow cancer of bureaucracy ends up. It now has three "administrative" employees for every medical employee. All those clerks are really good at curing people, I guess! Frequent bulletins on the flailing but ineffectual attempts to "fix" the system will appear here -- as well as bulletins on the dreadful things it does to patients and the long waits they endure.

On all my blogs, I express my view of what is important primarily by the readings that I select for posting. I do however on occasions add personal comments in italicized form at the beginning of an article.

I am rather pleased to report that I am a lifelong conservative. Out of intellectual curiosity, I did in my youth join organizations from right across the political spectrum so I am certainly not closed-minded and am very familiar with the full spectrum of political thinking. Nonetheless, I did not have to undergo the lurch from Left to Right that so many people undergo. At age 13 I used my pocket-money to subscribe to the "Reader's Digest" -- the main conservative organ available in small town Australia of the 1950s. I have learnt much since but am pleased and amused to note that history has since confirmed most of what I thought at that early age.

I imagine that the the RD is still sending mailouts to my 1950s address!

NOTE: The archives provided by blogspot below are rather inconvenient. They break each month up into small bits. If you want to scan whole months at a time, the backup archives will suit better. See here or here